JAKARTA: Malaysian palm oil futures rose to a one-week high on Tuesday, supported by positive export data, a weak ringgit and dry weather conditions.
The benchmark December palm oil contract on the Bursa Malaysia Derivatives Exchange ended up 1.5 percent by the close, at 2,183 ringgit ($508) a tonne.
Prices earlier touched 2,201 ringgit, their highest since Sept. 15, and have now gained 10 percent so far this month.
"The market is up strongly on the back of good exports, a weak ringgit and adversity of weather conditions," said a trader with a commodities brokerage in Kuala Lumpur.
"Production is coming down, exports are going up, ringgit is coming down -- everything is pointing to friendly factors in the market," he said, adding that prices could hit as high as 2,250 ringgit per tonne this week.
Traded volume stood at 52,448 lots of 25 tonnes each, well above the average 35,000 lots usually traded at the close.
Exports of Malaysian palm oil products for Sept. 1-20 rose 13.3 percent, cargo surveyor Societe Generale de Surveillance said after Monday's close.
Earlier, cargo surveyor Intertek Testing Services (ITS) said on Monday that exports of Malaysian palm oil products for Sept. 1-20 rose 7.6 percent.
A weak Malaysian ringgit, which makes palm cheaper for offshore buyers, has helped support palm in recent weeks.
The ringgit has lost 18 percent so far this year, and is emerging Asia's worst performing currency.
"People are talking about the weakening ringgit," said a Jakarta-based palm trader. "The market is only slightly higher, a maximum of $10 (per tonne)."
There is a growing consensus among weather forecasters for a strong El Nino this year, with some climate experts warning that it could turn into one of the strongest on record.
Palm oil prices remain near the two-week lows, however, at 2,088 ringgit touched on Monday.
In related news, Indonesia's demand for fatty acid methyl ester (FAME) for
biodiesel will soar to 5.14 million kiloliters in 2016, up more than four-fold
from 1.2 million kiloliters in 2015, the CEO at state-owned energy company
Pertamina, told reporters.
Indonesia has also ordered three palm companies to suspend operations for
allegedly causing forest fires, an environment ministry official said.
In competing vegetable oil markets, the most active January soybean oil
contract on the Dalian Commodity Exchange fell 0.6 percent, while the
U.S. December soyoil contract eased 0.6 percent in late Asian trading.
Palm, soy and crude oil prices at 1003 GMT
Contract Month Last Change Low High Volume
MY PALM OIL OCT5 2119 +33.00 2093 2120 240
MY PALM OIL NOV5 2157 +33.00 2133 2172 4732
MY PALM OIL DEC5 2183 +32.00 2160 2201 29634
CHINA PALM OLEIN JAN6 4282 +40.00 4272 4332 1160582
CHINA SOYOIL JAN6 5324 -30.00 5310 5400 616492
CBOT SOY OIL DEC5 26.54 +4.50 26.47 26.73 6601
INDIA PALM OIL SEP5 403.70 +4.50 399.30 405.60 1786
INDIA SOYOIL OCT5 573.50 +0.95 568.20 574.90 18325
NYMEX CRUDE OCT5 45.68 -1.00 45.37 46.48 2186
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
($1 = 4.2940 ringgit)
($1 = 65.8500 Indian rupees)
($1 = 6.3750 Chinese yuan)
- Reuters
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